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Technology Stocks : Information Architects (IARC): E-Commerce & EIP
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To: Jeffrey S. Mitchell who wrote (5601)5/1/1998 7:29:00 PM
From: sibe  Read Replies (1) of 10786
 
There have been many suggestions for why Alydaar's profits have not met expectations: For example, 1) Clients are slow in sending their code, and 2) Alydaar's contracts with big names may be with only a regional branch of the company, and not the entire world-wide company.

However, I'd like to suggest another reason that has not been discussed much on this thread. Perhaps Alydaar's cost-per-line charge is below the industry average.
The following quote is from Alydaar's 1997 10-K, Alydaar post #5601:
"Industry wide, the costs per LOC generally range from $.30 to $1.50. It is anticipated that such costs will increase significantly as the year 2000 approaches."

I found it interesting that the statement did not make mention of where Alydaar stands in relation to the industry standard. I remember a post a long time ago by thump9 (I believe) who said that Alydaar was charging DuPont something very cheap, certainly nothing near $1 a line. Also, these cost per line estimates usually refer to the entire remediation process, including testing, which by some estimates is at least half the work. Alydaar does not do testing and perhaps charges much less than the above estimates for that reason. Also, if in fact DuPont or others have a lock-in price, then Alydaar's charge will be even further behind the industry standard as time passes. Could it be that one reason so many Fortune 500 companies signed up with Alydaar is that Alydaar offered a lower price with minimal testing since the SmartCode is relatively free of errors?

This cost issue stood out for me because I noticed that Alydaar's contract announcements rarely mentioned price. I think the SAIC contract was the only one that did. Now I realize that companies in general prefer not to discuss price, but I've seen many contract announcements by other Y2k vendors that mention price. Also, many big names like Merrill Lynch have stated how much they plan to spend on the problem.

I just brought this idea up because I am puzzled why the revenues aren't higher with 41 contracts.
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